The Bubble - Should You Worry?

by Osman Parvez

With all the doom and gloom housing scenarios sprouting on various blogs and being carried by the national media, it's easy to feel pessimistic. You might even start to think the Sky is Falling.

Well, should you be worried about Boulder real estate? Are you even wondering if you should sell your property and rent while the market sorts out?

The answers lie in research about your local real estate market. Unless you live in Phoenix, Las Vegas, or Miami, don't base your real estate decisions on (often sensationalized) news blurbs about rising inventory and slowing sales in those communities. Know what's happening in your city, in your neighborhood, and on your street.

For most would be Boulder homeowners, our advice remains the same. Think long term holding period and true housing needs, not short term speculation. Purchase property at a price that comfortably fits your budget and be conservative when choosing a mortgage. Over the past six months, the spread between adjustable rate and fixed rate mortgages has narrowed and your monthly payments may not be all that different. Do your research and, if you're still thinking about buying with an adjustable rate mortgage, be sure to understand how your payments might increase in the future.

As I've said previously, while the bubble markets sort themselves out, we could see some increased inventory and slowing sales. In times of uncertainty, people tend to go into "wait and see" mode. I believe the fundamentals that underlie the value of Boulder homes are not rooted in speculation, and any short term slowing of our market could spell a rare opportunity for savvy home buyers.

If you're an investor looking for ways to maximize your return in the local real estate market, there remains potential in many types of investments. We've been talking to local investors about their experiences with "Pop Tops" in Martin Acres, "Fix and Flips," and even the business of importing custom luxury homes from Germany.

There are success stories and many lessons to be shared (stay tuned).

p.s. If you bought investment property in a bubble market and are wondering whether to get out, this piece from the Wall Street Journal may be useful.

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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

Please Note

This document contains forward-looking statements. You are strongly cautioned that investment results are subject to business, economic and other uncertainties. There are no guarantees associated with any forecast and the opinions stated here are subject to change at any time. Always consult your financial advisor before making an investment decision.